rose 0.7% for the December quarter 2010, compared with a rise of 1.0% in the September quarter 2010.

showed a larger increase for the December quarter 2010 than the CPI (+0.4%).

rose 4.0% through the year to December quarter 2010, compared to a through the year rise of 3.8% to September quarter 2010.

showed a larger increase through the year to December quarter 2010 than the CPI (+2.7%).

OVERVIEW OF PBLCI MOVEMENTS

The most significant price rises this quarter were for food (+2.6%), housing (+1.1%) and alcohol and tobacco (+0.9%).

The most significant offsetting price falls this quarter were for health (-2.2%), household contents and services (-0.8%) and clothing and footwear (-1.7%).

NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER)

Release Date

March 2011

16 May 2011

June 2011

15 August 2011

September 2011

14 November 2011

December 2011

1 February 2012

OUTCOME OF THE 16TH SERIES CPI REVIEW

The ABS recently completed an extensive review of its CPI and has announced changes including the continued quarterly publication of the outlays based Pensioner & Beneficiary Living Cost Index (PBLCI). The weighting pattern used in the PBLCI will be updated from the September quarter 2011. For more details about changes to the PBLCI and the CPI, please refer to Information Paper: Outcome of the 16th Series Australian Consumer Price Index Review (cat. no. 6469.0), or www.abs.gov.au.

IMPACT OF THE FLOODS

Flooding in Queensland began in late December 2010. It is expected that the first significant economic impact of this and floods in other states will be reflected in the March quarter 2011 release of this publication.

Price collection for the December quarter 2010 was not affected by the floods.

ROUNDING

Any discrepancies between totals and sums of components in this publication are due to rounding.

INDEX NUMBERS USE REFERENCE BASE OF JUNE QUARTER 2007 = 100.0

To allow comparison of the Pensioner and Beneficiary Living Cost Index with other ABS price indexes, all index numbers in this publication use a reference base of June quarter 2007 = 100.0. However, percentage changes used in this publication for the Consumer Price Index are as published in Consumer Price Index, Australia (cat. no. 6401.0). The percentage changes for Analytical Living Cost Indexes used in this publication are as published in Analytical Living Cost Indexes for Selected Australian Household Types (cat. no. 6463.0).

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070.

SUMMARY COMMENTARY

THE PENSIONER AND BENEFICIARY LIVING COST INDEX

The Pensioner and Beneficiary Living Cost Index (PBLCI) has been designed to answer the question:

'By how much would after tax money incomes need to change to allow age pensioners and other households whose principal source of income is government benefits to purchase the same quantity of consumer goods and services that they purchased in the base period?'

The PBLCI has been derived by combining the age pensioner Analytical Living Cost Index (ALCI) and the other government transfer recipient ALCI. Living cost indexes are intended to measure the impact of changes in prices on the out-of-pocket expenses incurred by these particular household types.

In the December quarter 2010 the PBLCI increased by 0.7%. The Consumer Price Index (CPI) rose by 0.4% over the same period.

Since the PBLCI series began in June quarter 2007 it has risen 13.1%, compared to 10.5% for the CPI. Differences have occurred for a number of reasons that relate to factors that affect the component series used to compile the PBLCI. The inclusion of mortgage interest and consumer credit charges and the different treatments of housing and insurance in the PBLCI result in variations between the PBLCI and the CPI series. The expenditure patterns of age pensioner and other government transfer recipient households differ from those of the overall household sector covered by the CPI. This also contributes to differences in the percentage changes.

For more information on the relationship between the PBLCI, CPI and the ALCIs, see the Explanatory Notes.

MAIN CONTRIBUTORS TO CHANGE

The PBLCI increased 0.7% for the December quarter 2010. Food (+2.6%) made the greatest contribution to the quarterly rise primarily due to seasonal factors and limited supply which led to price rises in fruit and vegetables. Housing (+1.1%) also recorded increases for the quarter primarily due to electricity and rents. Alcohol and tobacco (+0.9%) also recorded increases for the quarter.

The most significant offsets were provided by health (-2.2%), household contents and services (-0.8%) and clothing and footwear (-1.7%) primarily due to falls in pharmaceuticals, other household supplies and women's clothing.

The major contributors to the difference between the PBLCI (+0.7%) and the CPI (+0.4%) in the December quarter 2010 were fruit and vegetables, mortgage interest charges, electricity and rents. Rises for fruit and vegetables, for which PBLCI households have a relatively higher proportion of expenditure, recorded increases for the December quarter. The rise in mortgage interest charges this quarter also contributed to the difference due to mortgage interest charges being excluded from the CPI. PBLCI households also have a relatively higher proportion of expenditure attributed to electricity and rents than the wider CPI population group, both of which recorded a rise for the December quarter.

GRAPHS

Pensioner and Beneficiary Living Cost Index and CPI, All groups - Percentage change from previous quarter

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